State looks at cuts in local aid

Reductions proposed to O'Malley would hit schools, health agencies and local police

Maryland's budget secretary has proposed about $66 million in additional cuts in funds for local jurisdictions, including reductions in state aid to public schools, community colleges, health departments and local police, according to an internal document obtained yesterday by The Baltimore Sun.

Gov. Martin O'Malley, who must close a roughly $415 million gap in the budget year ending June 30, has not made final decisions on the options contained in a spreadsheet dated yesterday, spokesman Rick Abbruzzese said. By law, the state budget must be balanced and O'Malley, a Democrat, has been steadily cutting back on the state's $14 billion operating budget because of plummeting tax receipts.

In October, he ushered through more than $300 million in cuts. Last month, he ordered all state workers to take two to five unpaid days off in order to save more than $30 million more.

O'Malley considered asking the Board of Public Works to approve another round of cuts at tomorrow's meeting, but has postponed the vote. "The governor is still considering his options ... before making a final decision," Abbruzzese said. "These proposed reductions will be one piece in the puzzle necessary to balance the '09 budget and the 2010 budget."

In previous budget-cutting rounds, O'Malley, a former Baltimore mayor, has tried to spare local governments that are also being hammered by the national economic and real estate meltdown. But local officials have been prepared in recent days for a round targeting the counties.

"We've been given notice that there will be more reductions proposed," said David Bliden, counsel to the Maryland Association of Counties. "It's just the nature of the deterioration of the economy."

Among the proposed cuts is reducing state aid to community colleges to the funding level of fiscal year 2008. That would generate about $8 million in savings, but it might require some colleges to cut out classes, said Clay Whitlow, executive director of the Maryland Association of Community Colleges.

Whitlow said he did not think colleges would raise tuition at midyear because of the cuts, but similar cuts next year might force campuses to "think seriously" about such raises. The state faces a projected $2 billion revenue shortfall next year, according to legislative analysts.

Michael Pritchard, a spokesman for Frederick Community College, said the campus has been expecting and preparing for more cuts. In addition to shutting the campus down last Friday, "we eliminated out-of-state travel for conferences and workshops."

O'Malley is also looking at 15 percent reductions to state aid for local health and police departments. State funding accounts for a "small but meaningful" portion of these departments' budgets, Bliden said, and cuts can mean a reduction in essential services.

County officials declined to comment on the proposed reductions because they had not seen them. But Dr. Joshua M. Sharfstein, Baltimore's health commissioner, said that in general the demand for public health services increases during times of economic hardship.

The largest line item in the proposed reductions is a $38 million cut to many of the state's largest school districts in the middle of the academic year. The money would have come from a state fund used to offset expenses in districts that face the highest costs, such as Baltimore City and Montgomery and Prince George's counties.

Barring a major infusion of federal funds, more pain for local governments likely looms in 2009 and 2010. Del. Norman H. Conway, an Eastern Shore Democrat who chairs the House Appropriations Committee, said this week that lawmakers must seriously debate whether counties should permanently share in some costs borne by the state, such as teacher pensions.

That kind of talk worries Bliden. "We are now dealing with a cyclical problem ... and there will be a recovery," he said. "So reductions to local governments should be temporary and not permanent."